Women more successful with corporate crowdfunding than men: Maastricht University study

Corporate crowdfunding - borrowing money from the general public - works better for women than men. Women complete their crowdfunding campaigns about 20 percent faster, according to a new study by Maastricht University, NOS reports.

The researchers analyzed 934 campaigns on three Dutch financing sites, involving amounts ranging from 1,500 to 150,000. The researchers can’t name the sites but said that one focuses specifically on entrepreneurs in the development sector, one on business loans in a general sense, and the third on both private and business loans. Women did better on all three platforms.

Previous research already showed that women receive just as good conditions as men in crowdfunding for private loans, while they often receive less good conditions through traditional financial institutions. The new study shows that women doing corporate crowdfunding are able to close their campaigns faster without compromising on their conditions, like paying investors higher rates.

Discrimination against women in the financial world is a well-known phenomenon,” lead researcher Pomme Theunissen said. “They get credit less often, and when they do get it, they often have to pay higher interest rates and provide more guarantees. They get a worse deal, and banks get away with it.”

The result is that women, more often than average, leave a bank without success and then go looking for alternatives. “More and more women realize that crowdfunding can be interesting for them,” Theunissen said. “It is not massive yet, but it’s emerging more and more.” He added: “If women get a worse deal from the bank, you get relatively more good women on crowdfunding platforms.

The effect may be further enhanced by investors’ herd behavior. Crowdfunding campaigns are often over very quickly, with many lasting only a few days and some even just a few seconds. “Then you have to choose very quickly. If you don’t have that much self-confidence, you tend to go for a campaign that is almost full. That must be good, investors think. And you see that effect more strongly in plans by female entrepreneurs.”

Theunissen said the crowdfunding market amounted to around 1 billion euros in 2022. The figures for 2023 will be released in the coming weeks and are expected to show further growth.

The Maastricht University researcher is currently also studying female entrepreneurs who are also mothers - “mompreneurs.” According to him, the results indicate that mothers are more likely to start their own businesses if they have more time to do so, for example, through more extensive parental leave. “In Germany, the number of enterprising mothers fell when parental leave was shortened,” Theunissen said. “More time and peace gives a greater chance of entrepreneurship.”